Abstract
In 2016, China increased sustainability practices among companies listed on China’s stock market, making environmental regulations one of their integral policies. This states that highly polluting industries like the energy industry are required to comply with the sustainability requirements set. Concerning this event, research was conducted in 2016 to 2017, on the development of environmental disclosure (ED) practices in China and the impact of different variables on environmental disclosure index (EDI). Focusing on 150 energy companies listed on the Shanghai and Shenzhen stock exchange, the findings show that if the company had a better ROA, firm size, leverage and environmental accreditation certificate, they would like to publish more relevant environmental information.
Highlights
Between 1978 and 2000, China has achieved rapid growth and has been expanding dramatically
The objective of this study was to analyze if there is a positive association between financial performance and environmental disclosure (ED) in China’s energy industry
The findings appear to imply that while the formal institutional rules are in place, ED in the energy industry is still a less prevalent practice in China since they have been adopting various policy measures to control industrial environmental problems
Summary
Between 1978 and 2000, China has achieved rapid growth and has been expanding dramatically. Shows that the energy industries play an essential role, both the industrial value-added and the quantities of leading products in China. With the increase of Chinese business ventures with other countries, awareness of environmental problems contributed to the effort of the Chinese government to strengthen its regulatory environment (Jahiel 2006). Ministry of Finance (MOF) released the Regulations on Enterprise Accounting (1993), the Accounting Act of the PRC (1985, revised in 1999), and the Standard of Enterprise Accounting and Issues of Concern (2000), mainly focusing on accounting standards. Only a few clauses are related to environmental issues (Cai et al, 2016). There are no such regulations and statutory requirements for the energy companies in China to disclose environmental reporting. China’s environmental reporting practices have tended to lag behind those of other countries in the region
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